Judge Rules For Asbestos Lawyers And Trusts Facing Investigation From State AGs

Advertising

A Utah judge has dismissed a complaint from a number of states that the four biggest asbestos trusts and the trial lawyers who run them failed to answer claims they were mismanaging the funds, Legal Newsline has found.

The complaint, first filed by Utah's attorney general, was dismissed by a Salt Lake City-based judge Sept. 11 and targets the actions of the trusts' Future Claims Representatives and Trust Advisory Committees.

"The TACs, comprised of asbestos plaintiffs’ attorneys largely from a handful of prominent firms, have outsized power over the billions of dollars in the trust system," it says.

"They represent a large proportion of current asbestos claimants, and so vote on their behalf in approving the governing documents. Thus, the evidentiary requirements for claims — such as the claimant’s work history and proof of exposure — are primarily controlled by the same attorneys who collect contingency fees on millions of dollars of claims paid from a trust each year."

No written order has been issued, but one of the arguments made by the defendants was that a landmark U.S. Supreme Court ruling, handed down after the complaint was filed, meant that Utah lacked jurisdiction to handle the complaint.

That ruling, in a case involving drug company Bristol-Myers Squibb, bars plaintiffs from suing in a state in which they have little or no connection. It means that the four trusts do not have to reply to the civil investigation demands (CIDs) sent by 13 states asking for detailed information on how they are managed.

The trusts – set up by bankruptcy courts to manage claims against Armstrong World Industries, Babcock & Wilcox, DII Industries and Owens Corning/Fibreboard – were sent the demands as Utah and the other states believed they were being mismanaged and abuse was occurring.